Where the margin is won or lost.
WHAT FOOD COST MEANS
The cost of ingredients as a proportion of the selling price.
WHY IT MATTERS
It is the largest controllable cost in most food businesses.
HOW TO CALCULATE IT PER DISH
The cost of every ingredient in the portion, divided by the price.
WHAT TO INCLUDE
Everything: garnish, oil, seasoning, packaging.
WHY THE SMALL ITEMS
They accumulate substantially across volume.
WHAT TO ESTABLISH
A target proportion for your type of operation.
WHAT TO DO ABOUT DISHES ABOVE IT
Reprice, reformulate, or remove.
WHAT DRIVES COST ABOVE TARGET
Portions larger than specified Wastage Theft Supplier price increases absorbed Over-preparation
WHAT TO MEASURE
Wastage, by category and reason.
WHY BY REASON
Spoilage, over-production, returns and trimming need different responses.
WHAT TO DO ABOUT SPOILAGE
Order more often in smaller quantities Rotate stock properly Review what is not selling
WHAT STOCK ROTATION REQUIRES
Older items used first, physically arranged so it happens.
WHAT TO DO ABOUT MENU ITEMS THAT DO NOT SELL
Remove them.
WHY
They tie up ingredients that spoil.
WHAT TO REVIEW WHEN SUPPLIER PRICES CHANGE
Dish costs, and prices.
WHY
Absorbed increases erode margin invisibly.
WHAT TO COUNT
Stock, regularly.
WHAT DIFFERENCES REVEAL
Wastage, theft or recording errors.
